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Groups ‘COOL’ off about Canadian tariffs threat

With the clock ticking toward the May 23 deadline for the United States to comply with a World Trade Organization (WTO) ruling about the U.S. mandatory Country of Origin Labeling (COOL), supporters and opponents are steaming over the issue.

The ongoing dispute between the United States, Canada, and Mexico began in December 2008. In early March, the U.S. Department of Agriculture released its recommendations to be in compliance with the trade issue and labeling requirements. One of the issues at hand is whether animals exported from Canada to the United States for feed or immediate slaughter can be designated as meat derived from animals born, raised, and harvested in the United States. The WTO has determined the United States has the right to label, but some aspects violate a trade agreement in place.

Some media outlets have reported that Canadian Ag Minister Gerry Ritz is upset with the World Trade Organization’s ruling.

Chris Clayton, DTN/Progressive Farmer ag policy editor, reported in an April 10 article that “Canadian press reported the Canadian government is now prepared to impose $984 million a year in punitive tariffs over the COOL issue.”

U.S. organizations, including the National Cattlemen’s Beef Association, had made a stand with Canada. In an April 12 beef association press release, the cattlemen’s president mentioned Canada’s action, “including extensive retaliatory measures.”

While opponents are making headlines, four organizations which support the COOL program held a May 2 teleconference to address the issue and respond to questions.

National Farmers Union

National Farmers Union President Roger Johnson said a letter was sent in April to U.S. Secretary of Agriculture Tom Vilsack, in which 229 organizations -- farm, rural, faith, environmental, and consumer -- united to support COOL.

Johnson said Canada is currently implementing a COOL-like program, as are 41 other countries.

The packers and processors and others who are opposed to COOL have stated that the program will cost the slaughter/processing industry $2 billion in additional costs, as well as thousands of jobs, if it continues.

These costs are “way off base,” Johnson said.

Johnson countered the Canadian threats of “extensive retaliatory measures.”

Canada cannot do this “unless the WTO allows it and the WTO has not allowed it,” Johnson said.

Johnson said the Office of Management and Budget estimated COOL as having “insignificant costs ... not in the billions” as opponents cite.

The March 11 Federal Register, under the proposed COOL rule changes, cites costs of $32,764,500, ranging from $16,989,000 to $47,326,500.

Johnson took a strong stand, saying “it is a packer-driver issue ... with the packer influence driving the agenda.” Large slaughter or packer plants “make more money by blending foreign products into American meat and pass it off as U.S.-produced ... that is their preference,” Johnson said.

U.S. Cattlemen’s Association

U.S. Cattlemen’s Association President Jon Wooster also addressed the rumored retaliatory tariffs. For these to go into effect, the COOL rules must be finalized, he said, and then the steps to proceed will come into play, including a compliance panel, an appellate body, a dispute settlement body, and an arbitrator, totaling more than nine months before the tariffs could take effect.

Wooster said the United States also can appeal, and added, “I want to set the record straight ... [the tariffs] will not take place in the immediate future.”

Wooster also said the proposed provisions of COOL will make the law “stronger and more meaningful.”

Consumers

“Surveys indicate a strong consumer belief of the right to know” where meat comes from, Wooster said. See “Consumer poll results” for more.

The groups believe that information for consumers will be more accurate with the proposed changes, including not allowing the former “ground meat” label to be used.

The U.S. Department of Agriculture inspection stamp is used on all animals slaughtered in U.S. plants, whereas the COOL labels make the distinction of where the animal was born, raised, and slaughtered. One of the proposed labels states, “Born and Raised in Country X, Slaughtered in the U.S.”

Consumer poll results

U.S. Cattlemen’s Association President Jon Wooster cited the following results in an April 15 cattlemen’s association press release:

•“A 2002 survey of consumers in Chicago and Denver found that 75 percent of participants preferred to buy meat products labeled with country of origin as opposed to unlabeled products, with the preferences being strongest for beef products.

•“A national poll in 2007 found 94 percent of those surveyed believe consumers have a right to know the country of origin of the foods they purchase, and 85 percent of consumers say knowing where their food comes from is important.

•“A 2012 survey found consumers willing to pay $1.77 more per 12-ounce portion for a meat product labeled ‘Product of the U.S.’ compared to an unlabeled product.”

Large slaughter or packer plants ‘make more money by blending foreign products into American meat and pass it off as U.S.-produced ... that is their preference.’